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If you decide to use or rely on the information or make decisions based on the information in this website (which VLA does not recommend) VLA is not liable to you or any third party in any way for any loss, damage, costs or expenses you or they may suffer or incur as a result.

Prohibited behaviour by debt collectors

Information about behaviour by a debt collector that is against the law.

Behaviour that is against the law

People from debt collection agencies who are attempting to collect debts or to repossess goods must not:

  • use physical force, undue harassment or coercion
  • enter or make threats to enter a private home without legal authority
  • refuse to leave a workplace or private home when asked to leave
  • use any threat, deception, or misrepresentation to get into a private home
  • do or threaten to do anything that may intimidate a person or a member of that person's family (like carrying a firearm)
  • do or threaten to do anything that may expose a person or family member to ridicule (like parking a vehicle outside the house with 'debt collector' written on the paintwork)
  • use any document that looks like an official document (for example, using a fake warrant to seize property) (see recent ACCC case below)
  • impersonate a government official or employee
  • try to take possession of property without legal authority (for example, when there has been no court decision to prove that the debt is owed)
  • speak about the debt or threaten to do this, to any person who does not have a legitimate interest in the debt (for example, the neighbours or a credit reporting agency or an employer)
  • speak to a person under 18 unless the young person owes the money
  • say anything untrue about:
    • how much money is owing
    • what might happen if the money is not paid
    • how they will get the money
  • contact a person in a way that they have asked not to be contacted, unless there is no other way to make contact (for example calling at work when they have a home number)
  • make any contact at all if the person has written and asked them not to, except through a court or tribunal
  • demand payment from anyone unless they have reasonable belief that a debt is owed by that person (or is an agent of the person owing money).

See s. 45—Australian Consumer Law and Fair Trading Act 2012 (Vic)(opens in a new window).

Exceptions

These laws do not apply to a sheriff, police officer, a bailiff or a government employee.

What is a course of conduct?

A course of conduct is defined as behaviour that happens more than once.

See s. 46(2)—Australian Consumer Law and Fair Trading Act 2012 (Vic)(opens in a new window).

Remedies

If a person has been humiliated or distressed due to a course of conduct by a debt collector and the debt is a consumer debt, the person may apply to the Victorian Civil and Administrative Tribunal (VCAT) or to a court for an award of damages of up to $10,000.

This remedy is in addition to any other available remedy.

Debt collectors must not charge debtor

It is an offence for a debt collector to charge a fee to the debtor (person who is alleged to owe money) for the cost of recovering the debt.

They can recover reasonable enforcement expenses on behalf of the debtor.

See s. 107—National Consumer Credit Protection Act 2009 (Cth)—Schedule 1—National Credit Code(opens in a new window).

Penalty

The maximum penalty for attempting to charge a fee is 120 penalty units.

See s. 52—Australian Consumer Law and Fair Trading Act 2012 (Vic)(opens in a new window).

More information

Legislation

Australian Consumer Law and Fair Trading Act 2012 (Vic)

  • s. 3—defines 'consumer debt', 'debt', 'engage in debt collection',
  • s. 52(5)— defines 'debt collector', 'debtor',
  • s. 52—creates offence and penalty for charging a fee to the debtor
  • s. 47(1)—defines 'prohibited person'
  • s. 47—certain persons prohibited from engaging in debt collection
  • s. 45—prohibited debt collection practices
  • s. 46—penalties for prohibited practice
  • s. 46(1)—additional remedy for distress or humiliation

See Australian Consumer Law and Fair Trading Act 2012 (Vic)(opens in a new window).

National Credit Code (National Consumer Credit Protection Act 2009 (Cth))

  • s. 107—recovery of enforcement expenses

See National Consumer Credit Protection Act 2009 (Cth)—Schedule 1—National Credit Code(opens in a new window).

Reference

Consumer Action Law Centre

The following information may be helpful to a person who is being hassled by a debt collector.

See:

  • What if I have been sued for a debt?
  • Debt collection—seeking compensation in relation to consumer credit and lease contracts
  • Debt collection—seeking compensation in VCAT
  • Debt collection—I'm being hassled by a debt collector, what should I do?
  • Debt collection—your right to stop contact
  • Do I have to pay an old debt?
  • Debt collection—keeping a record of debt collector contact
  • Debt collection—what do I do if a debt collector calls?

in the 'Debt collection' tab in Consumer Action Law Centre—Fact sheets(opens in a new window).

Australian Securities and Investments Commission (ASIC)

See:

Business Licensing Authority Victoria

The Business Licensing Authority Victoria sits within Consumer Affairs Victoria. It is the state body with responsibility for handling complaints about debt collectors.

See: 'Penalties - debt collectors' in Consumer Affairs Victoria—Debt collectors(opens in a new window) and Business Licensing Authority Victoria(opens in a new window)

Case where misleading use of documents was found

Federal Court finds misleading and deceptive practices by debt collector

A lawyer has been found to have engaged in misleading and deceptive conduct when collecting debts by a case brought by the Australian Competition and Consumer Commission (ACCC) in the Federal Court in October 2011. The lawyer was found to have used notices that were similar to official court documents.

See ACCC—Court declares lawyer engaged in misleading debt collection(opens in a new window)

Or access the case at Australian Competition and Consumer Commission v Sampson [2011] FCA 1165 (17 October 2011)(opens in a new window)

Updated